Tag: Vietnam

  • Vietnam’s biggest taxi firms blame Uber, Grab for losing business

    Vietnam’s biggest taxi firms blame Uber, Grab for losing business

    The traditional taxi companies describe the competition as ‘harsh’ and ‘unfair’. Vietnam’s major taxi company Mai Linh has reported the worst business in five years while another big player Vinasun projected a 50-percent drop in profit this year, and the two blamed competition with ride-hailing apps.

    Despite arriving late in Vietnam’s taxi market, Uber and Grab have been winning significant footholds for their fare transparency, quality of service and fashionable technology.

    The unlisted Ho Chi Minh City-based Mai Linh said its transport business lost nearly VND84 billion ($3.7 million) last year, after making a profit of VND325 million in 2015.

    The company’s net profit last year, plunged nearly 70 percent in the same period to VND43 billion, the firm’s financial report showed.

    Ho Huy, chairman of the company’s management board, said Uber and Grab were key reasons to have made 2016 a difficult year for Mai Linh and other traditional taxi firms.

    He said the market has seen “harsh competition”, with unfair taxation. Uber, for example, was paying a 3-percent value added tax, while taxi firms said they have to pay a 10-percent VAT and 20 percent corporate income tax. Uber now keeps 20 percent revenue of a ride and sends 80 percent to the driver.

    Huy also blamed Uber and Grab for worsening traffic in Ho Chi Minh City by adding 25,000 cars to the streets in recent years.

    Vinasun, also based in Ho Chi Minh City, said competition with ride-hailing apps has made it lower the profit target for 2017, the third cut in a row.

    Vinasun’s gross profit is now projected at VND205 billion, down 48 percent from 2016, based on the company’s plan to be submitted to the shareholder meeting scheduled late this month.

    But the blaming has received little support from the public, as many people said they were unhappy with poor and unreliable services provided by taxi firms, such as drivers refusing to serve short distance or failing to show up regardless of clients’ booking.

  • Major Vietnamese sugar firms in merger talks

    Major Vietnamese sugar firms in merger talks

    Once established, the new company, will be the biggest sugar firm on Vietnam’s stock market. Thanh Thanh Cong Tay Ninh Joint Stock Company, a subsidiary of Thanh Thanh Cong Group, and Bien Hoa Sugar Joint Stock Company are planning to merge.

    Thanh Thanh Cong Tay Ninh’s board of directors will submit the plan for approval at a snap company general meeting set for late May or early June.

    The board plans to ask shareholders to agree to issue new shares to replace all of Bien Hoa Sugar’s shares on the stock market.

    Following the merger, the new company’s market capitalization will be an estimated VND10 trillion ($440 million).

    Thanh Thanh Cong Tay Ninh and Bien Hoa are currently among the largest listed sugar companies in Vietnam.

    At the end of 2016, Thanh Thanh Cong Tay Ninh had total assets of more than VND7.3 trillion ($321.2 million) and equity of nearly VND3 trillion ($132 million), while Bien Hoa had over VND6 trillion and roughly VND2.28 trillion.

    The current market capitalization of Thanh Thanh Cong Tay Ninh is VND6.2 trillion, while Bien Hoa’s is estimated at VND3.7 trillion.

    Bien Hoa Sugar shares were up 4.58 percent to VND13,700 at the end of Thursday’s trading session, while Thanh Thanh Cong Tay Ninh’s were down 0.2 percent at VND24,450.

  • ANZ sells retail business in Vietnam to South Korea’s Shinhan

    ANZ sells retail business in Vietnam to South Korea’s Shinhan

    The Australian bank said it will focus on its institutional banking, its biggest business in the region. Australian lender ANZ has announced to sell its retail business in Vietnam to South Korea’s Shinhan to focus resources on institutional banking.

    The bank has entered an agreement to transfer all eight branches, including retail staff in Hanoi and Ho Chi Minh City, to Shinhan Bank Vietnam, part of the Seoul-based Shinhan Financial Group, Farhan Faruqui, ANZ international group executive, said in a statement on Friday.

    Faruqui said the sale will allow the bank to focus resources on institutional banking, its “largest business in Asia.”

    “We will be maintaining our presence through our institutional bank in Vietnam which will continue to support our corporate clients in the Greater Mekong Region,” he said.

    ANZ’s institutional bank has a presence in 15 different markets in Asia and was ranked as one of the top four corporate banks in the region by market intelligence provider Greenwich Associates in 2016.

    ANZ’s retail business serves 125,000 customers in Vietnam, and includes $241.2 million in lending assets and $603 million in deposits. The Southeast Asian country’s economy has one the world’s fastest growing rates.

    ANZ said the transfer is subject to regulatory approval and expected to complete by year end.

    Rumors about the sale have been circulating since late last year after the bank sold its wealth management and retail business in Singapore, Hong Kong and three other Asian markets to Singaporean DBS for nearly $80 million above book value.

    Vietnam’s credit growth this year is targeted at 18 percent to facilitate the country’s annual economic expansion of 6.7 percent, the central bank has said. Last year the economy grew 6.21 percent from 2015, the slowest in two years, even though the banking sector posted an annual credit growth of 18.39 percent.

  • Vietjet Announces Five-year Plan to Enable Sustainable Growth

    Vietjet Announces Five-year Plan to Enable Sustainable Growth

    Vietjet is to embark on a Five-year Plan to enable sustainable growth beginning 2017. The ambitious plan was announced at the Annual Shareholders’ Meeting of the Vietjet Aviation Joint Stock Company in Ho Chi Minh City.

    The program, focusing on sustainable development, involves investments in enhancing internal human resources; protecting the environment; carrying out corporate social responsibilities; complementing national tourism development strategy; promoting local economic development; popularizing cultural practices and aviation civilization among passengers and in the community.

    In 2017, Vietjet is committed to operating the airline with top priorities on safety and reliability, continuing to innovate and improve service quality and operation efficiency and managing the recently listed company in accordance with international standards and the Vietnamese Accounting Standards (VAS) and International Financial Reporting Standards (IFRS).

    “Vietjet is ready to conquer new heights. I am confident that there is a bright future in the air and Vietjet is making every effort to bring it closer,” said Vietjet Chairwoman Nguyen Thanh Ha.

    The meeting also reviewed the operation of the fast growing new-age carrier in 2016, approved the business plan for 2017 as well as the contents related to management and administration.

    ACHIEVEMENTS IN 2016

    Report of business results in 2016 submitted to the meeting showed that Vietjet achieved positive business results in 2016. The airline operated 84,455 safe flights, recorded high percentage of OTP at 83.57% and of technical reliability at 99.57%, being listed in the top airlines that operate A320/A312 family in the region. Flight operation, ground operation and engineering safety indicators are listed in the group of highest quality airlines in the region. The airline also recorded in 2016 its turnover of 27,499 billion dong (USD1.21 billion), after tax profit of 2,496 billion dong (USD109 million), an increase of 38.6 percent and 113.2 percent respectively compared to 2015, exceeding 3 percent and 9 percent respectively over the target. Earnings per share stood at 9,586 dong (USD0.42).

    In 2016, Vietjet received 12 new aircraft, increasing its fleet to 41 aircraft including 30 A320 and 11 A321 aircraft, transporting 14.05 million passengers, an increase of 50.9% compared to 2015, leading the Vietnam domestic market.

  • Viettel launches nationwide 4G services

    Viettel launches nationwide 4G services

    Vietnam’s Viettel has launched 4G services across Vietnam after completing a nationwide rollout in just six months.

    The operator has now achieved 95% coverage with its 4G network, and officially launched services on Tuesday.

    The network consists of 36,000 4G base stations using 4-transmit 4-receive (4T4R) technology to improve coverage and capacity, as well as around 320,000km of domestic fiber backbone.

    According to the report, the network delivers average real-world speeds of 30Mbps to 50Mbps, but services will be provided for 40% to 60% cheaper than current 3G services.

    Viettel also plans to offer 4G-capable smartphones for as little as 1.3 million dong ($57.17), and provide free 4G SIM exchanges.

    Vietnam’s deputy prime minister Vu Duc Dam has praised Viettel for achieving the seemingly “impossible” task of launching 4G services nationwide in just six months, and expressed appreciation for the fact that the network incorporates hardware and software researched and produced domestically by Viettel’s engineers.

  • Vietnam beats China, South Africa in new healthcare ranking

    Vietnam beats China, South Africa in new healthcare ranking

    “Vietnam did very well in the study,” said Darrell West, one of the authors of the report.

    The country got the best performance in health system, scoring 19 out of 20, surpassing China and far distancing itself from Southeast Asian peer Indonesia. Nurses and midwives as well as physicians were the contributors to this high score.

    Its weaknesses are in the government’s health management capacity and infrastructure.

    Healthcare investment in Vietnam mostly comes from the public sector. To attract greater private sector investment, the country should improve transparency, make policy reforms and undertake regulatory reviews designed, the report said.

    Vietnam has a growing population, which requires better and more effective health services.

    West recommended Vietnamese leaders seek to improve its medical facilities, diagnostic systems and medical service delivery systems. These kinds of improvements will build confidence among private investors and create a climate where investors feel their financing will yield benefits.

    Vietnam’s high position in this ranking may come as a surprise for many, considering the amount of criticism directed at the healthcare system over the years. But the ranking does not simply reflect the current state, but looks at the potential of improvement brought by research and development.

  • Vietnam’s car imports jump 34 pct y/y in Q1 on tax cuts

    Vietnam’s car imports jump 34 pct y/y in Q1 on tax cuts

    Vietnam’s car imports have risen a staggering 34.4 percent from a year ago to 26,500 units, with more than half of them coming from low-tariff markets in Southeast Asia, customs figures show.

    The car import value in the first quarter edged up just 1 percent from the same period last year to $488 million, data from the General Customs Department showed.

    Cars from Southeast Asian countries totaled 14,460 units, accounting for 55 percent of the quarterly import volume and which jumped 67.6 percent from a year ago, the data show. The import from Indonesia increased five-fold.

    The strong purchase was fueled by large tariff cuts from major markets like Indonesia and Thailand, citing several importers. The import tariffs on cars from ASEAN countries have been cut to 30 percent as of January 2017, from 40 percent last year, before being fully removed in 2018.

    The tax cuts have helped reduce the retail price in Vietnam by 6-7 percent, the businesses said.

  • Vietnam Airlines starts second service to Sydney

    Vietnam Airlines starts second service to Sydney

    Vietnam Airlines added a second route from Vietnam to Sydney (SYD). The SkyTeam carrier now offers three times weekly flights on the 7,783-kilometre route between Hanoi (HAN) and Australia’s busiest airport, complementing the airline’s existing daily service from Ho Chi Minh City. The airline will face no competition on the new service which will be flown using its 274-seat 787-9s.

    Kerrie Mather, MD & CEO of Sydney Airport, said: “More than 240,000 passengers travelled between Sydney and Vietnam in 2016, and we’re delighted this new service will provide more choice for this growing market. With about 40% of Australia’s Vietnamese-born residents living in NSW, the service will make an important contribution to supporting the visiting family and friends market. Hanoi’s colonial architecture and rich sense of history also makes it the ideal holiday destination for Australian travellers.

    ” Adam Marshall, NSW Minister for Tourism and Major Events, added: “In 2016 NSW welcomed 32,000 visitors from Vietnam, which was up 27% on 2015. Between them, those visitors injected $162 million in overnight visitor expenditure into the state’s economy, which again was an 11% increase on the year prior.” With the airline also operating a daily service between Ho Chi Minh City and Melbourne, Vietnam Airlines currently has a monopoly on non-stop services between Australia and Vietnam.

  • Failed Pepsi, Nivea ads show industry’s diversity problem

    Failed Pepsi, Nivea ads show industry’s diversity problem

    ‘Between Nivea’s ‘white is purity’ ad and Pepsi’s ‘Black soda matters’ ad, I think it’s time to open my ‘Ask a Black person’ consulting firm.’ Recent high-profile advertising missteps by Pepsi and skin-care company Nivea underscored anew Madison Avenue’s awkward relationship with racial diversity at a time when the United States is becoming less white.

    PepsiCo’s ill-fated “Moments” spot, featuring model Kendall Jenner, was quickly pulled with an apology after being vilified for trivializing the “Black Lives Matter” movement.

    Nivea also apologized and withdrew an ad for a deodorant after its “White is Purity” pitch was embraced by white supremacists.

    Social media had a field day with the botched campaigns, which seemed to suggest scant progress from the white male bubble of the 1960s depicted in the popular television series “Mad Men.”

    “Between Nivea’s ‘white is purity’ ad and Pepsi’s ‘Black soda matters’ ad, I think it’s time to open my ‘Ask a Black person’ consulting firm,” comedian Travon Free said on Twitter.

    In fact, data shows a diversity deficit in a sector that both reflects and molds public sentiment.

    Only 4.1 percent of advertising industry employees in the country are African Americans, well below their 13.3 percent of the overall population. Latinos account for 12.3 percent of the industry, compared with 17.6 percent of the population.

    Nearly half of respondents among advertising employees said the industry was “terrible” or “not great” at hiring diverse professionals, with another 25 percent describing it as “mediocre,” according to a survey released last September by the American Association of Advertising Agencies.

    The trade group’s outgoing president Nancy Hill made publicly calling out “racist and misogynistic behavior” her New Years resolution for 2017.

    “I have realized given the current climate in our country and our industry, that doing that privately is tantamount to condoning the behavior,” Hill said in a column on a marketing industry website.

    “Others involved need to know that this industry does not tolerate this kind of thinking and its resulting behavior any longer.”

    Some major advertisers, such as Verizon, General Mills and Hewlett-Packard have threatened to fire firms that aren’t diverse enough.

    Pepsi misfires

    The demise of the Pepsi spot has especially provoked intense discussion throughout the industry. The company is led by Indian-born chief executive Indra Nooyi, a vocal proponent of diversity.

    A poll showed 40 percent on respondents blamed the debacle on lack of diversity or diversity of thought, while 25 percent said it reflected an overzealous approach to attracting millennials and 13 percent blaming the fact that it was made by Pepsi’s in-house creative team and did not involve an outside firm.

    The spot follows Jenner as she is stirred from a fashion shoot by a handsome Asian cellist to join an unspecified but peaceful street protest with people of all ethnicities, including African American street dancers.

    The two-and-a-half minute short film culminates with Jenner handing a Pepsi to a handsome grinning police officer, a move that draws wild applause from the crowd, including from a hijab-wearing photographer who nods in agreement as she records the moment.

    The spot spurred instant ridicule, most witheringly from Bernice King, who posted a picture of her father, Martin Luther King, being apprehended at a civil rights march by police.

    “If only Daddy would have known about the power of #Pepsi,” King wrote on Twitter.

    History repeating?

    Kelly O’Keefe, a professor of brand strategy at Virginia Commonwealth University, said the spot was shockingly heavyhanded in its constant hawking of cola.

    It reflected a “cloistered view of the world and distorted view of diversity,” he said, adding that the spot has dominated discussion in class this week.

    Jake Beniflah, executive director of the Center for Multicultural Science, thought the ad was a spoof when he first saw it because of the omnipresence of the product and in its creation of “utopian” world where every race is shown.

    “Perhaps they thought diversity on camera was enough, but obviously it wasn’t,” Beniflah said. “In fact, it backfired.”

    For Judy Davis, a marketing professor at Eastern Michigan University, the controversy stirred memories of Barbara Gardner Proctor, one of the women she profiled in her book, “Pioneering African American Women in the Advertising Business: Biographies of MAD Black WOMEN.”

    Proctor was fired in the 1960s from a large firm when she refused to work on a campaign that showed black women clamoring in the street for a hair product. The ad was a tasteless allusion to the civil rights movement, she said.

    “It was the same kind of trivialization of a serious social movement and taking that to promote some brand,” Davis said.

    “You would think in 2017 things would be different. But here we are seeing some of the same problems that were present 50 years ago, and I think that’s pretty amazing.”

  • Uber’s ride hailing service is finally legal in Vietnam

    Uber’s ride hailing service is finally legal in Vietnam

    The ride-hailing firm has now secured approval from local authorities after two previous rejections. The Vietnamese government has finally approved Uber’s application to trial its ride hailing services, a minister said, after having rejected requests from the company twice since 2015.

    Deputy Transport Minister Nguyen Hong Truong said on Monday that Uber Vietnam has fulfilled all necessary conditions to pilot its online ride-hailing application. However, the company will still need approval from local authorities before it starts operating, Truong added.

    The main obstacle facing Uber’s quest to legally offer its services in Vietnam was mainly its failure to register Uber Vietnam as a ride service provider since its arrival in June 2014 as the company expanded into Southeast Asia.

    Previously, Uber Vietnam was only registered to offer “consulting and management” and “market research and public opinion polling”. Now, it’s also registered to offer “information technology services and other computer related services.”

    The Transport Ministry previously said that Uber Vietnam’s authorization given by its parent company – the Netherlands-based Uber International Holding BV – which provides the smartphone application for Uber services, was insufficient.

    Market regulators said the parent company should be held responsible for the application rather than its Vietnamese business unit.

    Local regulators outlawed Uber’s smartphone app-based services in November 2015 after they flagged the company for tax avoidance.

    In an attempt to regulate ride-sharing services, Vietnamese regulators have allowed companies to run pilot programs through IT applications under 3-year contracts. Vietnam’s transport authorities earlier approved a pilot scheme for Grab Vietnam, Uber’s main rival, that also entered Vietnam in 2014.

    The Malaysia-based Grab was previously the only foreign-run transport service allowed to operate in five cities across Vietnam using registered private vehicles between 2016 and 2018.

  • ‘I’ve never aimed at being a billionaire’ says Vietjet CEO

    ‘I’ve never aimed at being a billionaire’ says Vietjet CEO

    Vietnam’s richest woman with an estimated net worth of $1.2 billion says she’s not used to the new title yet. CEO of Vietnam’s rising budget carrier VietJet said her main goal in business is not money or a “billionaire” title, which she received last month as the only self-made woman billionaire from Southeast Asia.

    “To be honest, I’m not used to it yet,” Nguyen Thi Phuong Thao, 46, said during the Forbes Vietnam Women Summit 2017 on Wednesday.

    “During my 30 years in business, I’ve never counted my money and I’ve never aimed at being a millionaire or billionaire,” Thao said.

    She said she did not grow up poor and thus earning money was never her primary goal. Her main concern, she said, is to build a strong stand for her business.

    Thao studied economics and finance in Soviet Russia in the 1980s. She founded VietJet, the country’s only private airline, in December 2011, after starting her career trading commodities in Eastern Europe and Asia.

    The “bikini” airline, nicknamed after its unique yet controversial promotional campaign for depicting a female crew in bikinis, now makes up 41 percent of the domestic air travel market, only one percentage point behind the national carrier Vietnam Airlines.

    It went public on February 28 and, in less than a week, reached the market value of $1.8 billion, ahead of Vietnam Airlines’ $1.7 billion.

    Thao said her carrier is not competing directly with Vietnam Airlines. “We create our own customers. We do not take them from others.”

    She said around 30 percent of VietJet’s passengers never flew before and more than half of their air routes are brand new.

  • Vietnam banks aim for high profit in 2017

    Vietnam banks aim for high profit in 2017

    At the AGM on March 25, LienVietPostBank’s shareholders agreed on this year’s development plan, aiming to reach US$66.2 million in pre-tax profit, 10 per cent higher than that of 2016 (US$59.5 million).

    Furthermore, the expected dividend rate was raised to 12%. LienVietPostBank also planned to raise capital from US$285.1 million to US$309.0 million by issuing 54 million shares.

    On April 10, VPBank organised its AGM. According to the AGM’s documents, VPBank’s pre-tax profit goal for this year is US$300.2 million, 38% higher than that of 2016.

    Its total assets are expected to reach US$12.4 million and total outstanding loans and corporate bonds US$8.9 million.

    With this expected total outstanding loan volume, to ensure the capital adequacy ratio (CAR) of 9% stipulated the State Bank of Vietnam (SBV), VPBank’s total capital must reach at least US$794.5 million.

    With its current owner’s equity of VND15.4 trillion (US$679.8 million), VPBank must increase capital by US$132.4-176.6 million.

    Techcombank’s documents for its AGM on April 15 showed that the bank is aming to increase consolidated pre-tax profit by 26% over 2016’s US$221.6 million.

    This year, Techcombank planned to increase its chartered capital by US$220.7 million (from US$391.9 million to US$612.6 million), and raise its total assets to US$12.4 billion.

    Other banks also expect great increases in profit. For instance, at its AGM on April 21, HDBank plans to get shareholders’ approval on the US$72.5 million pre-tax profit target, 28% higher than that of 2016.

    Meanwhile, OCB is planning to aim for US$34.4 million at its AGM, 60% higher than the previous year. Also, Vietcombank’s board of directors has set a goal to reach US$406.1 million in pre-tax profit, a 12% increase on-year.

    Well-founded optimism

    These ambitious figures in expected profit correspond with the results of the survey on business trends in the second quarter of 2017 for credit institutions and foreign bank branches in Vietnam, which was conducted by the Monetary Forecasting and Statistics Department of the SBV.

    According to the results, 89.5% of the credit institutions reported improvements in the first quarter of 2017. 90.4% of the institutions expected great increases in pre-tax profit compared to 2016.

    The expected average increase for the whole system is much higher than that showed in the survey in December 2016 (+ 13.4%).

    The banks’ optimism is due to domestic economic circumstances and good forecasts for the industry.

    According to the report on the economic situation in the first quarter of 2017 and forecasts on the fiscal year conducted by National Financial Supervisory Commission (NFSC), aggregate demand will improve in the upcoming time since directions from the government have initiated major increase in public investments in several key projects and capital disbursement in the application of high-tech agriculture projects.

    This positive attitude is also due to the fact that, despite the recent wake of US protectionism, based on the economic optimistic potential of the US and the globe at large, the International Monetary Fund (IMF) has forecasted the trade growth of Emerging Markets and Developing Economies at 4% in 2017, higher than the estimated 1.9% for 2016.

    A senior leader of the SBV shared with VIR that the bank would adjust the interest rates flexibly, in correspondence to macroeconomic indicators, inflation, and the currency market.

    Also, SBV would continue directing credit institutions to balance their capital and interest rates, economise operating costs, and increase business efficiency to lower interest rates.

    SBV continues its policy on operating currency rates flexibly, closely following the interbank foreign exchange market, the currency rate on the global market, economic and currency balances, and the monetary policy.

    It would also introduce measures to improve credit quality, focus lending on manufacturing and prioritised areas.

    “We would closely inspect the credit granting situation in some industries and fields that have high chances of risk, such as medium-long term credit, credit for large customers, credit for real estate, as well as BOT and BT transportation projects,”, the senior leader shared.

  • Vietnam gov’t tells fifth airline Vietstar to stand in the waiting line

    Vietnam gov’t tells fifth airline Vietstar to stand in the waiting line

    The airline will have to wait for Tan Son Nhat International Airport to complete expansion. Vietstar Airlines, a military-run company, will have to wait for the completion of an expansion project at Ho Chi Minh City’s Tan Son Nhat airport before it can get a license to fly passengers and cargo, the Vietnamese government said.

    The government will review the licensing for Vietstar Airlines, the fifth in Vietnam once operational, when Tan Son Nhat International Airport completes building new terminals and parking space, Prime Minister Nguyen Xuan Phuc was quoted as saying in a recent government document.

    Vietnam’s airline market has the third fastest growing pace in Asia-Pacific and the country is grappling with an acute dearth of airport capacity.

    A project to expand the country’s largest and yet overcrowded Tan Son Nhat airport has been under way, aimed at building runways, parking space and two terminals by 2018 to raise the passenger handling capacity to 45 million a year. The airport has to serve 42 million people annually, well over its design capacity of 25 million.

    In February Deputy Prime Minister Trinh Dinh Dung instructed transport, planning and aviation authorities to speed up work to finish upgrading the airport within this year.

    Vietstar Airlines was granted a general aviation license in 2011 when it was founded with a registered capital of VND400 billion ($17.6 million). It has been providing ground handling, aircraft maintenance and pilot training services.

    In 2015 it sought permission for flying passengers and goods, but was instead asked to raise its registered capital before it could get a license. The airline reported an equity of VND652.7 billion at the end of 2015, below the VND700-billion government requirement.

    It has since raised its charter capital to VND800 billion and last September, the transport ministry’s aviation department said Vietstar Airlines was qualified to get license for offering passenger and goods transport services.

    Vietstar aims to serve 500,000 passengers and carry 32,000 tons of good in the first year of operation, which had previously been expected to be in 2017.

    National flag carrier Vietnam Airlines, two budget carriers VietJet Air and Jetstar Pacific as well as Vietnam Air Services Company have been competing in a market that served 52,2 million passengers last year, up 29 percent from 2015, while the domestic sector alone grew 30 percent with 28 million passengers, based on aviation authority data.

  • Vietnam moves ceiling price mechanism for dairy products

    Vietnam moves ceiling price mechanism for dairy products

    The Government removed price ceilings on dairy products for children under six from April 1, 2017 according to the Ministry of Industry and Trade’s proposal.

    The Government has direct the ministry, other ministries and related agencies to manage prices of dairy products for children under six according to the Law on Price and other legal documents. They were also told to enhance State management in price control, anti-speculation and monopoly controls.

    After three years of use, the mechanism had many limitations so abolishing the mechanism was necessary and suitable with price management measures in a market economy.

    Experts said after removing the ceiling price mechanism, the State should encourage competition and a healthy business environment. They also suggested the State regulate the price if a firm gains a monopoly of dairy products or if dairy firms violate the Law on Competition.

    The most important task of the price management agency should be to follow the development of factors used to calculate the selling price. The agency should manage the prices of dairy products according to market rules, the experts said.

    Price ceilings were put in place in May 2014 by the Ministry of Finance. At the end of the second quarter of 2015, the ministry extended the price ceiling to March 1, 2017.

    The Ministry of Finance’s Pricing Management Department said after stabilising milk prices, the prices dropped by between 0.1 per cent and 34 per cent for milk products for under six year-olds.

    Experts said in the short term, buyers have enjoyed lower prices thanks to the price ceiling. But in the mid and long term, the mechanism would hinder the development of milk firms and reduce competition.

    They said the price ceiling for dairy products of children under six would not be for the long term because Việt Nam signed free trade agreements that forbade it from using price ceilings to manage the market.

    At present, 877 milk products for children under six have their prices listed on the websites of the Finance Ministry and local finance departments across the nation.

  • Grab Indonesia buys e-commerce startup Kudo

    Grab Indonesia buys e-commerce startup Kudo

    Ride-hailing firm Grab Indonesia has acquired e-commerce startup Kudo for an undisclosed amount, striking its first deal since pledging to invest US$700 million in its largest market.

    Kudo helps consumers without bank accounts to shop online by connecting them with online merchants and other service providers across 500 cities and towns.

    Based in Singapore, Grab says it plans to accelerate the expansion of Kudo’s network while bringing more riders and drivers on to its own platform. The two companies also plan to explore new financial products such as consumer loans and insurance.

    Former payment-processing company Euronet Worldwide executive Jason Thompson has been hired by Grab to head GrabPay. This digital wallet for riders was introduced last year.

    Grab’s Indonesian investment promise entails building its digital payments network over the next four years in a bid to win over the 260 million people in its largest market. The company’s car- and motorcycle-hailing businesses grew more than 600 per cent in Indonesia last year.

    Valued at more than US$3 billion, Grab intends to set aside as much as US$100 million to bankroll early-stage domestic startups in mobile and financial services. It has started establishing research centres in Bangalore, Ho Chi Minh City and Jakarta to complement engineering offices in Beijing, Seattle and Singapore.